401k Discretionary Lump Sum

History of the Lump Sum

In 2010 the SLA pension was frozen due to the rising cost of maintaining it. The Board voted and agreed to change the 401(K) contribution to compensate for freezing the pension. The first year of the freeze, the match was substantial and every year since has been getting smaller until it has remained at 3%. For instance, in 2012 it was approved at 8%, in 2013 it was approved at 6%, and by 2014 it was approved at 3% where it has remained.

Senior staff noticed the constant reduction was taking a toll on morale. In order to correct this, the SLA proposed a fixed 3% contribution of earnings to be given to the employees 401(K) regardless if they contribute or not. In addition to the fixed amount, the SLA would accrue another 3% which the board would have discretion on to give to the employees. They would vote at every Fall Board Meeting and the SLA would announce at the last Townhall the results.

At the October 2020 BOD Meeting, the board approved 3% discretionary to be accrued in 2021 based on the budgeted base salaries for the year. Below shows the 2021 accrued amount with the current base salary and the fluctuation between rate and what was accrued.

401k Matrix

Board Approved (October 2020) 2021 401k Discretionary Match Accrual
2020 Budget for 2021 Salaries	9,251,892
2020 Board Approved Percentage Match Accrual	3%
Total Accrued Amount	277,557
2021 Expected Salaries	8,662,940
2021 Board Directed Discretionary 401k Contribution Matrix
Percent of Expected Salaries	Total Contribution Amount	Impact on Financials
1%	86,629	(190,927)
2%	173,259	(104,298)
3%	259,888	(17,669)